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Weyerhaeuser reports second quarter results

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SEATTLE, July 26, 2019 /PRNewswire/ -- Weyerhaeuser Company (NYSE:WY) today reported second quarter net earnings of $128 million, or 17 cents per diluted share, on net sales of $1.7 billion. This compares with net earnings of $317 million, or 42 cents per diluted share, on net sales of $2.1 billion for the same period last year.

Weyerhaeuser Company logo. (PRNewsFoto/Weyerhaeuser Company)

View our earnings release and financial statements in a printer-friendly PDF.

Excluding an after-tax adjustment of $5 million for special items, the company reported second quarter net earnings of $123 million, or 16 cents per diluted share. This compares with net earnings before special items of $332 million for the same period last year and $80 million for the first quarter of 2019.

Adjusted EBITDA for the second quarter of 2019 was $343 million compared with $637 million for the same period last year and $365 million for the first quarter of 2019.

"Our businesses delivered strong operating performance in the second quarter despite various market and weather-related challenges," said Devin W. Stockfish, president and chief executive officer. "This includes the lowest controllable lumber manufacturing cost we have ever reported. Looking forward, although record-setting rainfall has held back U.S. housing activity in the first half of 2019, we see solid underlying market conditions and continue to expect the housing market will follow a modest growth trajectory. We remain committed to delivering industry-leading performance, fully capitalizing on all market conditions, and driving superior value for shareholders."

WEYERHAEUSER FINANCIAL HIGHLIGHTS


2019


2019


2018

(millions, except per share data)


Q1


Q2


Q2

Net sales


$1,643


$1,692


$2,065

Net earnings (loss)


($289)


$128


$317

Net earnings (loss) per diluted share


($0.39)


$0.17


$0.42

Weighted average shares outstanding, diluted


747


746


761

Net earnings before special items(1)(2)


$80


$123


$332

Net earnings per diluted share before special items(1)


$0.11


$0.16


$0.44

Adjusted EBITDA(1)


$365


$343


$637



(1)

Net earnings before special items is a non-GAAP measure that management believes provides helpful context in understanding the company's earnings performance. Additionally, Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold and special items. Net earnings before special items and Adjusted EBITDA should not be considered in isolation from, and are not intended to represent, an alternative to our GAAP results. Reconciliations of net earnings before special items and Adjusted EBITDA to GAAP earnings are included within this release.

(2)

First quarter 2019 after-tax special items include a $345 million noncash settlement charge related to the transfer of pension assets and liabilities through the purchase of a group annuity contract, a $15 million legal charge and a $9 million charge related to the early extinguishment of debt. Second quarter 2019 after-tax special items include a $5 million benefit from finalizing the noncash settlement charge incurred in first quarter 2019. Second quarter 2018 after-tax special items include $15 million of product remediation charges.

 

TIMBERLANDS














FINANCIAL HIGHLIGHTS


2019


2019



(millions)


Q1


Q2


Change

Net sales


$556


$532


($24)

Contribution to pretax earnings


$120


$102


($18)

Adjusted EBITDA


$193


$175


($18)

2Q 2019 Performance - In the West, forestry and road spending increased seasonally compared with the first quarter, and average log sales realizations decreased. Export log realizations were slightly lower, and the proportion of sales to export markets decreased due to the timing of vessel sailings. In the South, average log sales realizations were comparable, with a modest reduction in fee harvest volumes due to continued wet weather. In the North, fee harvest volumes were seasonally lower due to spring breakup.

3Q 2019 Outlook - Weyerhaeuser expects third quarter earnings and Adjusted EBITDA will be lower than the second quarter. In the West, the company anticipates seasonally lower harvest volumes, slightly higher road costs, and average log sales realizations modestly lower than the second quarter average. In the South, the company expects seasonally higher forestry expenses, largely offset by increased fee harvest volumes. Average Southern log sales realizations should be comparable to the second quarter.

REAL ESTATE, ENERGY & NATURAL RESOURCES








FINANCIAL HIGHLIGHTS


2019


2019



(millions)


Q1


Q2


Change

Net sales


$118


$81


($37)

Contribution to pretax earnings


$55


$35


($20)

Adjusted EBITDA


$106


$71


($35)

2Q 2019 Performance - Real estate sales were lower than the first quarter. The number of acres sold increased and average price per acre declined, primarily due to a large acre transaction in Montana which accounted for approximately half of the acres sold in the second quarter. Average land basis increased due to the mix of properties sold. Energy & Natural Resources earnings and Adjusted EBITDA were slightly higher than the first quarter.

3Q 2019 Outlook - Weyerhaeuser anticipates third quarter earnings and Adjusted EBITDA will be lower than the second quarter. The company continues to expect full year 2019 Adjusted EBITDA for the segment will be approximately $270 million.

WOOD PRODUCTS














FINANCIAL HIGHLIGHTS


2019


2019



(millions)


Q1


Q2


Change

Net sales


$1,094


$1,210


$116

Contribution to pretax earnings


$69


$81


$12

Adjusted EBITDA


$115


$128


$13

2Q 2019 Performance - Earnings and Adjusted EBITDA increased compared with the first quarter due to seasonally higher sales volumes and improved per unit manufacturing costs in engineered wood products. This was partially offset by a modest decline in average sales realizations for oriented strand board and slightly lower average sales realizations for lumber.

3Q 2019 Outlook - Weyerhaeuser anticipates third quarter earnings and Adjusted EBITDA will be comparable to the second quarter before any improvement in average sales realizations. The company expects comparable sales volumes and slightly lower fiber costs, offset by slightly higher unit manufacturing costs for engineered wood products.

UNALLOCATED














FINANCIAL HIGHLIGHTS


2019


2019



(millions)


Q1


Q2


Change

Contribution to pretax earnings (loss)


($530)


($36)


$494

Pretax charge (benefit) for special items


$475


($6)


($481)

Contribution to pretax earnings (loss) before special items


($55)


($42)


$13

Adjusted EBITDA


($49)


($31)


$18

2Q 2019 Performance - Unallocated variable compensation expenses declined in the second quarter. Results also included a small noncash foreign exchange gain in the second quarter compared with a charge in the first quarter.

Special items in the second quarter include a $6 million pretax benefit from finalizing the noncash settlement charge incurred in the first quarter related to the transfer of pension assets and liabilities through the purchase of a group annuity contract.

INCOME TAXES














FINANCIAL HIGHLIGHTS


2019


2019



(millions)


Q1


Q2


Change

Income tax (expense) benefit


$104


$37


($67)

Income tax (expense) benefit attributable to special items


$118


($1)


($119)

Income tax (expense) benefit before special items


($14)


$38


$52

2Q 2019 Performance - The provision for income taxes was a benefit for the second quarter, as the company adjusted its estimated annual effective tax rate to reflect lower pricing for lumber and oriented strand board.

ABOUT WEYERHAEUSER

Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900. We own or control 12.2 million acres of timberlands in the U.S., and manage additional timberlands under long-term licenses in Canada. We manage these timberlands on a sustainable basis in compliance with internationally recognized forestry standards. We are also one of the largest manufacturers of wood products. Our company is a real estate investment trust. In 2018, we generated $7.5 billion in net sales and employed approximately 9,300 people who serve customers worldwide. We are listed on the Dow Jones Sustainability North America Index. Our common stock trades on the New York Stock Exchange under the symbol WY. Learn more at www.weyerhaeuser.com.

EARNINGS CALL INFORMATION

Weyerhaeuser will hold a live conference call at 7 a.m. Pacific (10 a.m. Eastern) on July 26, 2019 to discuss second quarter results.

To access the live webcast and presentation online, go to the Investor Relations section on www.weyerhaeuser.com on July 26, 2019.

To join the conference call from within North America, dial 855-223-0757 (access code: 6886814) at least 15 minutes prior to the call. Those calling from outside North America should dial 574-990-1206 (access code: 6886814). Replays will be available for two weeks at 855-859-2056 (access code: 6886814) from within North America and at 404-537-3406 (access code: 6886814) from outside North America.

FORWARD-LOOKING STATEMENTS

This news release contains statements concerning the company's future results and performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934, including with respect to the following: building activity and U.S. housing growth; earnings and Adjusted EBITDA for each of our business segments; log sale realizations; fee harvest volumes as well as road costs and forestry expenses in our timber business; sales volumes and realizations as well as fiber and manufacturing costs for Wood Products. These statements generally are identified by words such as "believe," "project," "expect," "anticipate," "estimate," "intend," "strategy," "future," "opportunity," "plan," "may," "should," "will," "would," and expressions such as "will be," "will continue," "will likely result," and similar words and expressions. These statements are based on our current expectations and assumptions and are not guarantees of future performance. The realization of our expectations and the accuracy of our assumptions are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to:

  • the effect of general economic conditions, including employment rates, interest rate levels, housing starts, availability of financing for home mortgages and strength of the U.S. dollar;
  • market demand for our products, including market demand for our timberland properties with higher and better uses, which is related to, among other factors, the strength of the various U.S. business segments and U.S. and international economic conditions;
  • changes in currency exchange rates, particularly the relative value of the U.S. dollar to the Japanese yen, the Chinese yuan and the Canadian dollar, and the relative value of the euro to the yen;
  • restrictions on international trade and tariffs imposed on imports or exports;
  • the availability and cost of shipping and transportation;
  • economic activity in Asia, especially Japan and China;
  • performance of our manufacturing operations, including maintenance and capital requirements;
  • potential disruptions in our manufacturing operations;
  • the level of competition from domestic and foreign producers;
  • raw material availability and prices;
  • the effect of weather;
  • changes in global or regional climate conditions and governmental response to such changes;
  • the risk of loss from fires, floods, windstorms, hurricanes, pest infestation and other natural disasters;
  • energy prices;
  • our operational excellence initiatives;
  • the successful and timely execution and integration of our strategic acquisitions, including our ability to realize expected benefits and synergies, and the successful and timely execution of our strategic divestitures, each of which is subject to a number of risks and conditions beyond our control including, but not limited to, timing and required regulatory approvals;
  • transportation and labor availability and costs;
  • federal tax policies;
  • the effect of forestry, land use, environmental and other governmental regulations;
  • legal proceedings;
  • performance of pension fund investments and related derivatives;
  • the effect of timing of retirements and changes in the market price of our common stock on charges for share-based compensation;
  • the accuracy of our estimates of costs and expenses related to contingent liabilities;
  • changes in accounting principles; and
  • other matters described under "Risk Factors" in our annual reports on Form 10-K, as well as those set forth from time to time in our other public statements and other reports and filings with the Securities and Exchange Commission.

Forward-looking statements speak only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.

For more information contact:

Analysts - Beth Baum (206) 539-3907


Media - Nancy Thompson (919) 861-0342

RECONCILIATION OF ADJUSTED EBITDA TO NET EARNINGS (LOSS)

We reconcile Adjusted EBITDA to net earnings (loss) for the consolidated company and to operating income (loss) for the business segments, as those are the most directly comparable U.S. GAAP measures for each.

The table below reconciles Adjusted EBITDA for the quarter ended March 31, 2019:

DOLLAR AMOUNTS IN MILLIONS


Timberlands



Real Estate

& ENR



Wood

Products



Unallocated

Items



Total


Adjusted EBITDA by Segment:





















Net earnings (loss)


















$

(289)


Interest expense, net of capitalized interest(1)



















107


Income taxes



















(104)


Net contribution to earnings (loss)


$

120



$

55



$

69



$

(530)



$

(286)


Non-operating pension and other postretirement benefit costs(2)












470




470


Interest income and other












(10)




(10)


Operating income (loss)



120




55




69




(70)




174


Depreciation, depletion and amortization



73




3




46




1




123


Basis of real estate sold






48










48


Special items included in operating income (loss)(3)












20




20


Adjusted EBITDA


$

193



$

106



$

115



$

(49)



$

365




(1)

Interest expense, net of capitalized interest includes a pretax special item consisting of a $12 million charge related to the early extinguishment of debt.



(2)

Non-operating pension and other postretirement benefit costs include a pretax special item consisting of a $455 million noncash settlement charge related to the transfer of pension assets and liabilities through the purchase of a group annuity contract.



(3)

Operating income (loss) includes a pretax special item consisting of a $20 million legal charge.

The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2019:

DOLLAR AMOUNTS IN MILLIONS


Timberlands



Real Estate

& ENR



Wood

Products



Unallocated

Items



Total


Adjusted EBITDA by Segment:





















Net earnings


















$

128


Interest expense, net of capitalized interest



















91


Income taxes



















(37)


Net contribution to earnings (loss)


$

102



$

35



$

81



$

(36)



$

182


Non-operating pension and other postretirement benefit costs(1)












10




10


Interest income and other












(6)




(6)


Operating income (loss)



102




35




81




(32)




186


Depreciation, depletion and amortization



73




3




47




1




124


Basis of real estate sold






33










33


Special items included in operating income (loss)
















Adjusted EBITDA


$

175



$

71



$

128



$

(31)



$

343




(1)

Non-operating pension and other postretirement benefit costs includes a pretax special item consisting of a $6 million benefit from finalizing the noncash settlement charge incurred in first quarter 2019 related to the transfer of pension assets and liabilities through the purchase of a group annuity contract.

 The table below reconciles Adjusted EBITDA for the quarter ended June 30, 2018:

DOLLAR AMOUNTS IN MILLIONS


Timberlands



Real Estate

& ENR



Wood

Products



Unallocated

Items



Total


Adjusted EBITDA by Segment:





















Net earnings


















$

317


Interest expense, net of capitalized interest



















92


Income taxes



















65


Net contribution to earnings (loss)


$

161



$

22



$

329



$

(38)



$

474


Non-operating pension and other postretirement benefit costs












13




13


Interest income and other












(11)




(11)


Operating income (loss)



161




22




329




(36)




476


Depreciation, depletion and amortization



79




3




36




1




119


Basis of real estate sold






22










22


Special items included in operating income (loss)(1)









20







20


Adjusted EBITDA


$

240



$

47



$

385



$

(35)



$

637




(1)

Operating income (loss) includes a pretax special item consisting of $20 million of product remediation charges.

RECONCILIATION OF NET EARNINGS (LOSS) BEFORE SPECIAL ITEMS TO NET EARNINGS (LOSS)

We reconcile net earnings (loss) before special items to net earnings (loss) for the consolidated company, as those are the most directly comparable U.S. GAAP measures for each.

The table below reconciles net earnings (loss) before special items to net earnings (loss):



2019


2019


2018

(millions, except per share data)


Q1


Q2


Q2

Net earnings (loss)


$(289)


$128


$317

Early extinguishment of debt charge


9



Legal charge


15



Pension settlement charges


345


(5)


Product remediation charges (recoveries), net




15

Net earnings before special items


$80


$123


$332

The table below reconciles net earnings (loss) per diluted share before special items to net earnings (loss) per diluted share:



2019


2019


2018



Q1


Q2


Q2

Net earnings (loss) per diluted share


$(0.39)


$0.17


$0.42

Early extinguishment of debt charge


0.01



Legal charge


0.02



Pension settlement charges


0.47


(0.01)


Product remediation charges (recoveries), net




0.02

Net earnings per diluted share before special items


$0.11


$0.16


$0.44

 

Weyerhaeuser Company

Exhibit 99.2


Q2.2019 Analyst Package


Preliminary results (unaudited)



Consolidated Statement of Operations













Q1



Q2



Year-to-Date


in millions


March 31,

2019



June 30,

2019



June 30,

2018



June 30,

2019



June 30,

2018


Net sales


$

1,643



$

1,692



$

2,065



$

3,335



$

3,930


Costs of sales



1,322




1,390




1,447




2,712




2,795


Gross margin



321




302




618




623




1,135


Selling expenses



21




21




23




42




46


General and administrative expenses



89




80




80




169




158


Research and development expenses



1




2




2




3




4


Other operating costs, net



36




13




37




49




47


Operating income



174




186




476




360




880


Non-operating pension and other postretirement benefit costs



(470)




(10)




(13)




(480)




(37)


Interest income and other



10




6




11




16




23


Interest expense, net of capitalized interest



(107)




(91)




(92)




(198)




(185)


Earnings (loss) before income taxes



(393)




91




382




(302)




681


Income taxes



104




37




(65)




141




(95)


Net earnings (loss)


$

(289)



$

128



$

317



$

(161)



$

586




Per Share Information














Q1



Q2



Year-to-Date




March 31,

2019



June 30,

2019



June 30,

2018



June 30,

2019



June 30,

2018


Earnings (loss) per share, basic and diluted


$

(0.39)



$

0.17



$

0.42



$

(0.22)



$

0.77


Dividends paid per common share


$

0.34



$

0.34



$

0.32



$

0.68



$

0.64


Weighted average shares outstanding (in thousands):





















Basic



746,603




745,486




757,829




746,041




757,317


Diluted



746,603




746,232




760,533




746,041




759,992


Common shares outstanding at end of period (in thousands)



744,767




744,905




757,646




744,905




757,646




Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization (Adjusted EBITDA)














Q1



Q2



Year-to-Date


in millions


March 31,

2019



June 30,

2019



June 30,

2018



June 30,

2019



June 30,

2018


Net earnings (loss)


$

(289)



$

128



$

317



$

(161)



$

586


Non-operating pension and other postretirement benefit costs



470




10




13




480




37


Interest income and other



(10)




(6)




(11)




(16)




(23)


Interest expense, net of capitalized interest



107




91




92




198




185


Income taxes



(104)




(37)




65




(141)




95


Operating income



174




186




476




360




880


Depreciation, depletion and amortization



123




124




119




247




239


Basis of real estate sold



48




33




22




81




34


Special items included in operating income



20







20




20




28


Adjusted EBITDA(1)


$

365



$

343



$

637



$

708



$

1,181




(1)  

Adjusted EBITDA is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold, and special items. Our definition of Adjusted EBITDA may be different from similarly titled measures reported by other companies. Adjusted EBITDA should not be considered in isolation from and is not intended to represent an alternative to our GAAP results.

 

Weyerhaeuser Company

Total Company Statistics

Q2.2019 Analyst Package

Preliminary results (unaudited)


Special Items Included in Net Earnings (Income Tax Affected)












Q1



Q2



Year-to-Date

in millions


March 31,

2019



June 30,

2019



June 30,

2018



June 30,

2019



June 30,

2018

Net earnings (loss)


$

(289)



$

128



$

317



$

(161)



$

586

Early extinguishment of debt charge(1)



9










9




Environmental remediation charge















21

Legal charge



15










15




Pension settlement charges



345




(5)







340




Product remediation charges (recoveries), net









15







Net earnings before special items(2)


$

80



$

123



$

332



$

203



$

607























Q1



Q2



Year-to-Date



March 31,

2019



June 30,

2019



June 30,

2018



June 30,

2019



June 30,

2018

Net earnings (loss) per diluted share


$

(0.39)



$

0.17



$

0.42



$

(0.22)



$

0.77

Early extinguishment of debt charge(1)



0.01










0.01




Environmental remediation charge















0.03

Legal charge



0.02










0.02




Pension settlement charges



0.47




(0.01)







0.46




Product remediation charges (recoveries), net









0.02







Net earnings per diluted share before special items(2)


$

0.11



$

0.16



$

0.44



$

0.27



$

0.80



(1)  

During first quarter 2019, we recorded a $12 million pretax ($9 million after-tax) charge related to the early extinguishment of debt. This charge is included in Interest expense, net of capitalized interest in the Consolidated Statement of Operations.



(2)

Net Earnings before special items is a non-GAAP measure that management believes provides helpful context in understanding the company's earnings performance. Net Earnings before special items should not be considered in isolation from and is not intended to represent an alternative to our GAAP results.

Selected Total Company Items













Q1



Q2



Year-to-Date


in millions


March 31,

2019



June 30,

2019



June 30,

2018



June 30,

2019



June 30,

2018


Pension and postretirement costs:





















Pension and postretirement service costs


$

8



$

8



$

8



$

16



$

18


Non-operating pension and other postretirement benefit costs



470




10




13




480




37


Total company pension and postretirement costs


$

478



$

18



$

21



$

496



$

55


 

Weyerhaeuser Company
Q2.2019 Analyst Package
Preliminary results (unaudited)


Consolidated Balance Sheet











in millions


March 31,

2019



June 30,

2019



December 31,

2018


ASSETS













Current assets:













Cash and cash equivalents


$

259



$

212



$

334


Receivables, less discounts and allowances



398




408




337


Receivables for taxes



163




157




137


Inventories



451




425




389


Prepaid expenses and other current assets



141




132




152


Current restricted financial investments held by variable interest entities



362




362




253


Total current assets



1,774




1,696




1,602


Property and equipment, net



1,917




1,901




1,857


Construction in progress



102




134




136


Timber and timberlands at cost, less depletion



12,586




12,516




12,671


Minerals and mineral rights, less depletion



291




288




294


Deferred tax assets



18




33




15


Other assets



444




461




312


Restricted financial investments held by variable interest entities









362


Total assets


$

17,132



$

17,029



$

17,249















LIABILITIES AND EQUITY













Current liabilities:













Current maturities of long-term debt


$



$



$

500


Current debt (nonrecourse to the company) held by variable interest entities



302




302




302


Borrowings on line of credit



245




140




425


Accounts payable



243




271




222


Accrued liabilities



411




510




490


Total current liabilities



1,201




1,223




1,939


Long-term debt



6,156




6,153




5,419


Deferred tax liabilities



34




17




43


Deferred pension and other postretirement benefits



542




515




527


Other liabilities



398




397




275


Total liabilities



8,331




8,305




8,203


Total equity



8,801




8,724




9,046


Total liabilities and equity


$

17,132



$

17,029



$

17,249


 

Weyerhaeuser Company
Q2.2019 Analyst Package
Preliminary results (unaudited)


Consolidated Statement of Cash Flows













Q1



Q2



Year-to-Date


in millions


March 31,

2019



June 30,

2019



June 30,

2018



June 30,

2019



June 30,

2018


Cash flows from operations:





















Net earnings (loss)


$

(289)



$

128



$

317



$

(161)



$

586


Noncash charges to earnings (loss):





















Depreciation, depletion and amortization



123




124




119




247




239


Basis of real estate sold



48




33




22




81




34


Deferred income taxes, net



(123)




(43)




15




(166)




25


Pension and other postretirement benefits



478




18




21




496




55


Share-based compensation expense



9




7




9




16




18


Change in:





















Receivables, less allowances



(77)




(10)




(18)




(87)




(101)


Receivables and payables for taxes



(31)




6




10




(25)




15


Inventories



(60)




28




30




(32)




(36)


Prepaid expenses and other current assets



(5)




8




4




3




(1)


Accounts payable and accrued liabilities



(82)




127




103




45




(70)


Pension and postretirement benefit contributions and payments



(14)




(13)




(16)




(27)




(32)


Other



9




(17)




(19)




(8)




1


Net cash from (used in) operations


$

(14)



$

396



$

597



$

382



$

733


Cash flows from investing activities:





















Capital expenditures for property and equipment


$

(41)



$

(71)



$

(83)



$

(112)



$

(144)


Capital expenditures for timberlands reforestation



(18)




(13)




(14)




(31)




(34)


Proceeds from note receivable held by variable interest entities



253










253





Other



18




1




24




19




29


Net cash from (used in) investing activities


$

212



$

(83)



$

(73)



$

129



$

(149)


Cash flows from financing activities:





















Cash dividends on common shares


$

(254)



$

(253)



$

(243)



$

(507)



$

(485)


Net proceeds from issuance of long-term debt



739










739





Payments of long-term debt



(512)










(512)




(62)


Proceeds from borrowing on line of credit



245




140







385





Payments on line of credit



(425)




(245)







(670)





Proceeds from exercise of stock options



2




2




23




4




48


Repurchases of common shares



(60)










(60)





Other



(8)




(4)




(1)




(12)




(8)


Net cash used in financing activities


$

(273)



$

(360)



$

(221)



$

(633)



$

(507)























Net change in cash and cash equivalents


$

(75)



$

(47)



$

303



$

(122)



$

77


Cash and cash equivalents at beginning of period



334




259




598




334




824


Cash and cash equivalents at end of period


$

259



$

212



$

901



$

212



$

901























Cash paid during the period for:





















Interest, net of amount capitalized


$

127



$

59



$

67



$

186



$

172


Income taxes


$

50



$

1



$

41



$

51



$

58


 

Weyerhaeuser Company
Q2.2019 Analyst Package
Preliminary results (unaudited)














Timberlands Segment
















Segment Statement of Operations (1)
















in millions


Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018

Sales to unaffiliated customers


$

431



$

401



$

476



$

832



$

966

Intersegment sales



125




131




139




256




281

Total net sales



556




532




615




1,088




1,247

Costs of sales



413




405




431




818




853

Gross margin



143




127




184




270




394

Selling expenses



1










1




1

General and administrative expenses



22




25




24




47




46

Research and development expenses



1




1




1




2




3

Other operating income, net



(1)




(1)




(2)




(2)




(6)

Operating income and Net contribution to earnings


$

120



$

102



$

161



$

222



$

350























(1)

In January 2019, we changed the way we report our Canadian Forestlands operations, which are primarily operated to supply Weyerhaeuser's Canadian Wood Products manufacturing facilities. As a result, we no longer report related intersegment sales in the Timberlands segment and we will now record the minimal associated third-party log sales in the Wood Products segment. These collective transactions did not contribute any earnings to the Timberlands segment. We have conformed prior year presentations with the current year.

















Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(2)

















in millions


Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018


Operating income


$

120



$

102



$

161



$

222



$

350


Depreciation, depletion and amortization



73




73




79




146




158


Adjusted EBITDA(2)


$

193



$

175



$

240



$

368



$

508























(2)

 See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.






















Selected Segment Items

















in millions


Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018


Total decrease (increase) in working capital(3)


$

(24)



$

46



$

70



$

22



$

30


Cash spent for capital expenditures


$

(26)



$

(25)



$

(29)



$

(51)



$

(57)























(3)

Represents the change in prepaid assets, accounts receivable, accounts payable, accrued liabilities and log inventory for the Timberlands and Real Estate & ENR segments combined.

 

Segment Statistics(4)























Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018


Third Party


Delivered logs:





















Net Sales


West


$

205



$

194



$

262



$

399



$

528


(millions)


South



159




156




158




315




315




North



29




17




20




46




45




Total delivered logs



393




367




440




760




888




Stumpage and pay-as-cut timber



9




10




11




19




26




Recreational and other lease revenue



15




15




14




30




28




Other revenue



14




9




11




23




24




Total


$

431



$

401



$

476



$

832



$

966


Delivered Logs


West


$

106.92



$

104.07



$

132.24



$

105.52



$

131.91


Third Party Sales


South


$

35.35



$

35.45



$

34.55



$

35.40



$

34.69


Realizations (per ton)


North


$

59.68



$

62.10



$

64.92



$

60.52



$

62.59


Delivered Logs


West



1,920




1,864




1,984




3,784




4,003


Third Party Sales


South



4,499




4,400




4,560




8,899




9,070


Volumes (tons, thousands)


North



494




263




313




757




717


Fee Harvest Volumes


West



2,385




2,455




2,360




4,840




4,803


(tons, thousands)


South



6,492




6,367




6,630




12,859




13,381




North



627




378




423




1,005




972

























(4)


 Western logs are primarily transacted in MBF but are converted to ton equivalents for external reporting purposes.

 

Weyerhaeuser Company
Q2.2019 Analyst Package
Preliminary Results (unaudited)












Real Estate, Energy & Natural Resources Segment


















Segment Statement of Operations

















in millions


Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018


Net sales


$

118



$

81



$

58



$

199



$

109


Costs of sales



56




39




30




95




49


Gross margin



62




42




28




104




60


General and administrative expenses



7




7




6




14




13


Operating income and Net contribution to earnings


$

55



$

35



$

22



$

90



$

47



Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(1)

















in millions


Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018


Operating income


$

55



$

35



$

22



$

90



$

47


Depreciation, depletion and amortization



3




3




3




6




7


Basis of real estate sold



48




33




22




81




34


Adjusted EBITDA(1)


$

106



$

71



$

47



$

177



$

88























(1)

See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.


Selected Segment Items

















in millions


Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018


Cash spent for capital expenditures


$



$



$



$



$























 

Segment Statistics





















Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018



Real Estate


$

96



$

59



$

38



$

155



$

72


Net Sales

Energy and Natural Resources



22




22




20




44




37


(millions)

Total


$

118



$

81



$

58



$

199



$

109


Acres Sold

Real Estate



38,834




47,031




16,290




85,865




38,061


Price per Acre

Real Estate


$

2,424



$

1,063



$

2,258



$

1,678



$

1,847


Basis as a Percent of Real Estate Net Sales

Real Estate



50

%



56

%



58

%



52

%



47

%

 

Weyerhaeuser Company
2Q.2019 Analyst Package

Preliminary results (unaudited)











Wood Products Segment
















Segment Statement of Operations (1)

















in millions


Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018


Net sales


$

1,094



$

1,210



$

1,531



$

2,304



$

2,855


Costs of sales



967




1,070




1,125




2,037




2,145


Gross margin



127




140




406




267




710


Selling expenses



19




20




22




39




43


General and administrative expenses



35




34




31




69




65


Research and development expenses






1




1




1




1


Other operating costs (income), net



4




4




23




8




2


Operating income and Net contribution to earnings


$

69



$

81



$

329



$

150



$

599

























(1)

In January 2019, we changed the way we report our Canadian Forestlands operations, which are primarily operated to supply Weyerhaeuser's Canadian Wood Products manufacturing facilities. As a result, we will now record the minimal associated third-party log sales in the Wood Products segment. These transactions do not contribute any earnings to the Wood Products segment. We have conformed prior year presentations with the current year.



Adjusted Earnings before Interest, Tax, Depreciation, Depletion and Amortization(2)

















in millions


Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018


Operating income


$

69



$

81



$

329



$

150



$

599


Depreciation, depletion and amortization



46




47




36




93




72


Special items









20








Adjusted EBITDA(2)


$

115



$

128



$

385



$

243



$

671























(2)

See definition of Adjusted EBITDA (a non-GAAP measure) on page 1.


Segment Special Items Included in Net Contribution to Earnings (Pretax)

















in millions


Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018


Product remediation (charges) recoveries, net


$



$



$

(20)



$



$























Selected Segment Items


in millions


Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018


Total decrease (increase) in working capital(3)


$

(155)



$

75



$

3



$

(80)



$

(223)


Cash spent for capital expenditures


$

(30)



$

(53)



$

(68)



$

(83)



$

(120)























(3)

Represents the change in prepaid assets, accounts receivable, accounts payable, accrued liabilities and inventory for the Wood Products segment.

 

Segment Statistics

















in millions, except for third party sales realizations


Q1.2019



Q2.2019



Q2.2018



YTD.2019



YTD.2018


Structural Lumber

Third party net sales


$

444



$

495



$

681



$

939



$

1,250


(volumes presented

Third party sales realizations


$

392



$

388



$

541



$

390



$

521


in board feet)

Third party sales volumes(4)



1,133




1,274




1,261




2,407




2,401



Production volumes



1,145




1,193




1,180




2,338




2,340


Engineered Solid

Third party net sales


$

116



$

134



$

139



$

250



$

268


Section

Third party sales realizations


$

2,218



$

2,214



$

2,156



$

2,216



$

2,123


(volumes presented

Third party sales volumes(4)



5.2




6.1




6.4




11.3




12.6


in cubic feet)

Production volumes



5.9




6.0




6.4




11.9




12.7


Engineered

Third party net sales


$

70



$

86



$

92



$

156



$

170


I-joists

Third party sales realizations


$

1,709



$

1,662



$

1,630



$

1,683



$

1,609


(volumes presented

Third party sales volumes(4)



41




52




57




93




106


in lineal feet)

Production volumes



44




47




52




91




108


Oriented Strand

Third party net sales


$

160



$

156



$

277



$

316



$

509


Board

Third party sales realizations


$

223



$

213



$

367



$

218



$

341


(volumes presented

Third party sales volumes(4)



717




733




754




1,450




1,493


in square feet 3/8")

Production volumes



729




736




747




1,465




1,481


Softwood Plywood

Third party net sales


$

44



$

44



$

55



$

88



$

105


(volumes presented

Third party sales realizations


$

383



$

380



$

461



$

382



$

450


in square feet 3/8")

Third party sales volumes(4)



115